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Fiat ends Chinese venture amid tough competition in fastest growing car market

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Fiat ends Chinese venture amid tough competition in fastest growing car market

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Italy’s Fiat says it has pulled out of a money-losing Chinese joint venture with Nanjing Automobile after the firm merged with bigger Chinese group Shanghai Motors SAIC. Fiat will keep working with Nanjing in making vans and parts, but analysts say the break-up casts doubt on Fiat’s ability to meet its target of selling 300,000 units in China by 2010.

China is now the world’s fastest-growing auto market, with 8.5 million sales forecast in 2007. Beijing now invites foreigners to import their cars, providing they also make cars in China. Furthermore, analysts agree China’s own product is swiftly getting better.

SAIC Motors in Shanghai, the country’s largest city, says its ambition is to be one of the world’s top six auto producers by the end of this decade. Fiat in 2006 sold far fewer cars than it hoped to in China, a far fewer than SAIC and its US and German partners – General Motors and Volkswagen.

Chinese manufacturer Chery Automobiles has appeared as the likely successor to Nanjing as a partner for Fiat in the passenger car segment in China.